McGarty Minute: Cuarto
Welcome back, it's your weekly reminder that it's Friday, and it's not only May, but Cinco de Mayo, and we're entering third winter or fake spring phase. How was it 80+ degrees and sunny last weekend and 40 and raining today? It's not just the weather that is behaving erratically, the real estate market is doing the same thing. What we've been seeing in the field has been confirmed by the media, so it must be true!
The big news this week is that the Fed hiked rates for the third time this year. This is our reminder that the Fed rate does NOT equal mortgage rates. Matter of fact, mortgage rates went DOWN on that news.
The NWMLS went into overdrive and released the April stats yesterday (May 4th), which is about twice as fast as usual. Their report was fairly balanced and the summary was: We're down from this time last year, but we're up year-to-date. And by down, everything is down: new listings, sales, pending sales and prices. To quote the release "The key is we can’t compare today’s market to the record years we had during the pandemic." This is especially true for last spring, when it was clear that the days of 3% mortgages was disappearing and buyers were frantically buying. However, we're seeing the market spring back to life, we're also seeing "homes that are well priced continue to receive multiple offers" in the field. Chief Economist Matthew Gardner predicts that mortgage rates will "hold below 6% in the second half of this year." He also predicted that we'd end 2022 at 4%, so take that with a grain of salt.
Speaking of mortgage rates, rates were down this week to 6.45% for a 30-year fixed mortgage, according to Mortgage News Daily. This is the same pricing we saw back when the market sparked to life in February.
The Seattle Times' take on the NWMLS stats was surprisingly tame this month. The clickbait from the homepage was "King County home prices down 12%. See what’s happening near you." But they really didn't get very hyperlocal. The 12% number was pulled directly from the NWMLS release "median price change year-over-year is down 12%." However, the NWMLS release next sentence was much more positive, "Year to date, the median price is up 12%."
Their chart was essentially the inverse of the mortgage chart above. All indicators are pointing to us having passed the bottom of the market. Even if mortgage rates hold high, inventory will be constrained by lack of sellers willing to give up their 3% mortgages.
The actual title of the Seattle Times article was not as enticing, "Seattle-area housing market kicks off spring season with a whimper." And the article summed up the market just as nicely as the NWMLS release, "Home prices are ticking up, but are down from a year ago, as fewer buyers take the plunge and fewer homes hit the market. Some listings are attracting bidding wars, while others linger for weeks without offers." Ending with a solid dose of reality—"There’s kind of no rhyme or reason to what goes quickly and what sits on the market."
By The Numbers
This week we saw 249 new listings hit the Seattle / Bellevue / Kirkland areas, up 2% from last week's 244.
